There’s ‘incredible value’ in the stock market right now

The stock market’s positive response to a report that U.S. officials were considering lifting tariffs on China to get a trade deal was telling, but it wasn’t necessarily good, Imagala.com’s Jim Cramer said Thursday.

“Stocks that had been crushed on Chinese worries roared higher like this arrangement was already a done deal” despite the report being anonymously sourced, Cramer noted. “Even when we got contrary reports later in the session that perhaps there might be no deal, these stocks held onto most of their gains.”

So, while the market’s optimism can make you money, Cramer wouldn’t try to build a strategy around trade talks, especially with all the conflicting reports.

“I think it’s a sucker’s game to try to predict anything that goes on in Washington,” the “Mad Money” host said. “It’s pure chaos down there right now.”

Still, the late-2018 breakdown left the market so undervalued that “it feels dangerous not to buy stocks” at these levels, even if their catalysts are “nothing to write home about,” Cramer acknowledged.

“When you see this kind of positive action, you need to recognize what’s driving it. In the fourth quarter, stocks got way too cheap, and that overreaction to the downside has created incredible values that give investors a sense of certainty — they know they won’t be blown out if they buy something because there’s only so much much downside from these levels,” he explained. “When you have that sense of certainty, it’s very easy to pull the trigger and buy, which is why 2019 is turning out to be a much better year than many investors expected.”